Futures are up more than 5% and it appears that the 'bid' on the S&P futures will take the market to an OPEN around 1160...

Which leaves CV to ponder (a point that I rigorously debated and defended, ON MY OWN, last week)... A certain WSWB was credited as being a "genius", a "hero", last week for going all cash. As I recall, the SPX was at 1154 at that point that the announcement was made... CV pointed out that it was "pure luck", and that, in fact, many of the traders on this blog had already made "short bets" closer to the 1219 level.

My point was, how in Sam Hill could any computer algorithm predict a "Flash Crash" (for whatever reason it was precipitated - which is a subject that has already been endlessly noodled)... I suppose, those same algos weren't set with the same parameters that there would be a $962B (that's a "B", not an "M" for the fat finger types - Tuesday they'll probably come in and say that they "fat fingered" that bailout as well and the markets will tank again) bailout announced on Sunday night...

Anyway, here we are back OVER the SPX level that TWSWB made his famous announcement (and bathed himself in accolades for)... Is he still a hero? Sure, I guess...

It works the same way with the market itself... When the market is "melting up", it's supposed to be that way... There's no such thing as LIMIT UP...

CV is just this guy anyway... Nothing to see here, go about your business...

---
Posted by Andy T 5/10/10

Good Evening Capitalists,

This author doesn't have any clue about what happened last week, so I won't even pretend to understand or explain it. "It is it what it is." This is what can happen in markets where almost everybody is long and nobody is that short. That is why stocks can go 'bidless' and crash. It was probably some sort of "mistake" that caused a stock like Accenture to hit ZERO in a nano-second, but the way this "mistake" caused all Global stock exchanges, commodities, bonds and currencies to all react in a hugely negative way should serve as a powerful reminder of how "fragile" and connected these markets remain. So much for diversification....

There is only one way to diversify: Stay long some amount of cash*.

*Cash does NOT mean municipal bonds, corporate bonds, US Treasuries or money markets.

Inquiring minds note Fed to reopen dollar swap programThe Federal Reserve is going to reopen a program set up during the financial crisis, to make sure foreign banks have the dollars they need, the European Central Bank announced late Sunday. The Fed will ship dollars overseas through the Bank of Canada, the Bank of England, the ECB and the Swiss National Bank. The Bank of Japan will be considering similar measures soon, the ECB said. The facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and other financial centers, the ECB said in a statement on its web site. The ECB said the first repurchase operations for dollars against ECB-eligible collateral would be carried out on Tuesday.Gee, fancy that. The world needs more dollars to defend the Euro.

and yet the SEC is meeting to find out what hapened. They want to try and slow down trades in extreme down moves. I call BS. It should work in both directions. Period. The SEC better try to explain why there are no circuit breakers going up.

Why should our 17% IMF funding for this European problem go forward. Did the Europeans offer to fund 17% of our nuclear option? Why is the American taxpayer getting saddled with such massive future promissory notes?

Why does this still seem like Tar Baby? We are globally creating debt by proxy, and the real suckers are the taxpayers. One of these days we are going to realize we are stuck. Greece pay off this loan? NACIH...(Not a chance....)Fannie and Freddie...ditto.

This big government/global government/socialism thingy may take a little longer for me to get used to than I thought. When investing in equities has become nothing more than lemmings going to and fro...sometimes away from the cliff, sometimes toward it...

mcHAPPY is still a holder of FAZ and FXP and, despite early morning plummet, still green. I look forward to the rest of this week or even what things are looking like by the end of the day. I might actually get my shot at TZA now.

what's br doing?Mike in Nola Says: Barry,I assume you have reversed your search for good shorts? I’m sure there will be some, but how long will it take for them to materialize after the squeeze?~~~BR: This is a major unexpected change — I need to review market internals and make adjustments before putting on major positions.

Received an email from a darling female friend asking if she should buy aapl this morning! i sent her that ratigan rant.. and said after last week's crash, that my skepticism for the market had only increased..

yeah I don't think you'll have much trouble with something like that (TZA) I'd think it would be ok, anything with normally low volume I wouldn't touch right now, you are just outmatched against the bots with those things, you can't beat them.

RBC Capitals Market's London Foreign Exchange analyst Elsa Lognos said in a report,"Whether this lasts will depend on the periphery states using this breathing space to implemnet the fiscal tightening as promised.."

Remains difficult to see single currency sustaining any kind of streanth.

just keep watching the put/call. It was easy to see last week too many people were early in calling for a short squeeze because there were no shorts, not easy to see the 'flash crash' just that we werent' set up for short squeeze..yet. Put/call exploded Friday so today is no shock. As of 9 this morning we are getting a .88 put/call. it was .45 as we approached the top, most optimistic betting in the options pits in a decade.

You can follow along here if you don't have access to the date at work/on platform:

"So what we're left with is that a financial firestorm with its genesis in private sector off balance sheet SPVs is being solved at the sovereign level with a limited-funding SPV to guarantee to the periphery. Niiiiceeee...."

Under the surface banks are hardly doing so well. Think of it like all the consumers that thought they were doing well from 03-07 because they could get equity out of their never ending rising in value home. Banks are likely headed for a major shitstorm this summer. Watch the MW interview from last week.

The thing about 1190 is that there is a big gap just above it from 5/4, I'd think if we had the energy to get all the way up there then this isn't a second wave, that gap gets closed, and we'd be looking at new highs.

May 10 (Bloomberg) -- The fallout from the European debt crisis raises the risk of a “double dip” recession for the global economy, said Stephen Roach, chairman of Morgan Stanley Asia Ltd.

“When you have a vulnerable post-crisis economic recovery and crises reverberating in the aftermath of that, you have some very serious risks to the global business cycle,” Roach said in an interview today on Bloomberg Radio with Tom Keene. “This concept of the global double dip which no one wants to talk about,” he said, “is alive and well.”

Gordon Brown stepping down isnt all good news IMO.Clegg couldn't be seen to do a deal with him politically, now he has stepped down it clears the way for a Labour/Libdem coalition. So although Conservatives get the most votes they could be out of power

The November election can't come soon enough to suit me. I wasn't crazy about Bush, but I didn't see this coming. And apparently this massive increase in government can't be derailed until we have a new congress.

"Obama also lamented the spread of social media and blogs, through which "some of the craziest claims can quickly claim traction"

I would have to agree with him. Remember the crash was caused by a fat finger mistake? Oh... wait a minute, that was CNBC/MSM selling that line which the masses obviously bought hook, line, and sinker because I had to explain the difference over Mother's Day dinner yesterday.

He just realized that people have caught on to the BS and will blog, skype, facebook, twitter, etc about the BS. I guess he believed with all of the TV appearances, weekly webchat, etc. that he could maintain some form of control.......NOT

According to Socionomic history this is only the start re: Obama. I'm quite afraid of what's going to happen in the US in the coming years. I doubt I'll live here the rest of my life, but I worry the longer I wait, the less options I'll have.

@McHappy, I'm not sure if it's part of free week but RP put out an interim report over the weekend if you have access it's interesting, lots more cycle/fibo charts in there, I haven't read it all the way through in detail yet.

"We are first time homebuyers, we didn't know home prices were overvalued, we just knew we had to get in before prices kept going up and up and up"

My comment: Look asshole, your statement alone reveals your over abundance of ingornace as well as your participation in the global idiot bubble. If you "don't know about housing" why are you getting involved in the first place? Because everyone else was? You don't deserve a bailout and you do deserve to lose.

If they think real estate is bad, wait until they see what happens to their stocks/retirement accounts.

You are right! As the southern boy once said," Gosh, before today I didn't know what a market timer was, and now I are one!"

I have indeed tried that buying high and selling low thingy. And I keep hearing commercials for lottery tickets in Tennessee, and from the commercials I really ought to buy a few next week so that I can buy Canada.....

Some days I wish I just stuffed all my money in a pillow and slept for 5 years, or however long this global idiot thing takes to play out.

Other days, trading seems like fun...

MM is such a good writer I am sure that he will resurface at some point. Everyone living in Fraudfield County officially works at a hedge fund now, except for one bloke who drives the trash truck and the ladies who work at Dunkin' Donuts.

Can someone explain to me why volatility(pricing) is inversely correlated with the market direction? Should they be independent? Upward volatility like this morning kills call sellers just the same as downward volatility kills put sellers, no? But the VIX dropped like a rock on the rally...

Yes, good point on Put/call, it was fairly obvious a put/call at .45 a few weeks along with seeing distribution days via the II Buy Climax tool which hit a 20 year high, that something big was setting up, of course, I didn't expect it to be 1k pts in a few minutes, lol.

I think for now it's a decent tool but it will likely lose all near term value in P3 because intraday swings are going to be huge and make it hard to find any decent long term comparison. I like it as a backup to help confirm where you are at in the wave count.

FXP is a double short of FXI, which is a basket of Shanghai stocks ("red chips") that trade in Hong Kong. It usually trades like the NASDAQ, from my observations. Love the TZA idea, not going to play it just yet.

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